Credit cards have become a familiar feature of the lifestyle in the world. Imagining a consumer economy functioning without this item is difficult. Nowadays these cards are considered the most convenient of all types of payments. The boom of the credit card industry has affected everyone in the world of plastic money. “A credit card is a small plastic card issued by a bank that allows consumers to borrow money to pay for goods and services that they may not be able to afford. In 1949, the very first credit card was introduced by the diners club.
Frank McNamara invented the card and this card was intended for the use in restaurants by the members of the diners club” (Baughman). These cards work to make tremendous revenues to credit card companies, banks, and retail sales. They, however, do not work the way that they used to work for the customers that possess them. The credit card has transformed American society economically, socially, and technologically.
The invention of the credit card has significantly transformed the American economy. ‘Credit cards and the strong connection with the economy has helped the country, stock market, and retirement plans because consumers have freely used credit cards to fuel their lifestyles’ (Freinberg). The creation of the credit card has led to many factors that have both strongly affected the economy in a positive way but also in a negative way. American consumers rely on the worldwide availability of the credit to make everyday purchases. The stock market has dramatically increased by the use of credit because credit card debt gets more and more expensive every time a consumer that owns one does not pay what they are supposed to.
Having a credit card means that the consumer that owns one would have to be responsible and use it wisely. If not then there are many challenges that may be faced with having one, for example: someone may buy something that is pretty expensive and not think about how they will pay that back or even if they will be able to pay it back by the day it is due. Which means that they would have to pay more than what would have been paid in the beginning. The more it takes someone to pay it back the more it will cost to pay it back.
Therefore, there is a possible chance that they may go into debt if not responsible with this item. “Credit cards did not only transform the way in which Americans shopped and consumed but it also created a “buy now, pay later” culture, which stimulated economic growth. At the individual level, there were many costs, one of the highest being an increase in consumers debt. Credit cards and other loans caused lots of emotional stress for individuals” (Freinberg).
This quote asserts how credit cards have transformed the way that Americans shopped but also created a mass market by the consumers good. This has stimulated economic growth for businesses. “Buy now, pay later” makes people buy more consumers goods because it allows people to buy items that they are not able to afford by borrowing money. Borrowing money increases the amount of money in the economy and prices of items will rise further increasing the rate of expansion. In addition, these reasons represented has led to social changes in American society.
The invention of the credit card has significantly transformed American society socially. “Unlike cash, credit cards promote feelings of membership and belonging. Having and using a credit card is a rite of passage, creating the illusion that the credit card holder has made it as an adult and is a success. Unique designs, newsletters, rewards for use, and special deals for holders make owners of cards feel that they are apart of a unique group” (Freinberg). This quote asserts how credit cards can promote feelings of belonging Everyone likes to feel like they are apart of something. So, when they have the chance to they are going to take it. That is how credit cards have become what they are today.
If consumers did not care about being apart of something then the chances of a credit card being existing still would have probably ended a while ago. But that just happens to not be an option because the credit card gives consumers this illusion that they can do so much now and as long as they continue to do what they are doing everything will be fine. “The Consumer Credit Protection Act was intended to protect often-vulnerable consumers from the hidden costs of borrowing or buying on credit. The concern of business that customers would buy fewer goods and borrow smaller amounts when they became aware of the true annual cost of borrowing was unfunded”(Rajiv).
This quote asserts, Consumers that owned a credit card were going into debt. That’s why the Consumer Credit Protection Act (CCPA) was created. The CCPA ensures that consumers would receive fair and honest credit practices. All this does is to make sure that lenders explain the actual cost of borrowing money in a way that consumers can actually understand. This Act has helped a lot by giving consumers a better understanding of what it is like to own a credit card and what they have to be prepared for when it comes to borrowing money. In addition, these reasons presented here has led to technological transformations in American society.
The invention of the credit card has significantly transformed the American society technologically. “Innovations of the credit card industry came in slowly. Technological advances were usually borrowed from other industries rather than specifically for credit card usage. The credit card industry influenced technology by offering a new outlet for innovative products and methods” (Mandell and Holmes).
This quote asserts, credit cards did not have many technological advances in the beginning because they were borrowed from other industries. Even though credit cards did not have many technological advances they still helped with many technological advances and methods within the future and still continue to do. As technology grew ahead, the credit card industry became national and eventually global. “Advanced technology was the only way for companies to manage the vast numbers of merchants and consumers who were linking themselves via their credit cards and in the process creating a mountain of debt.
Technology made managing the credit card business profitable” (Freinberg). This quote asserts how credit cards made things so much easier with managing and be on top of things. The credit cards teach many people different lessons and give them a better understanding of how to improve on something so they can make it where they need to be. Even though there are many challenges along the way when it comes to a credit card. It has also have given us many factors that has helped us improve technology today.
In conclusion, the credit card has transformed American society economically, socially, and technologically. Credit cards have strong connections with the economy which then helps the country because consumers rely on credit cards to fuel their lifestyles. If there were no credit cards then some consumers might not be able to understand what it’s like to actually struggle with something.
They teach consumers some many valuable lessons about how there are challenges along the way but as long as they stay on top of things then they can accomplish anything. Within the future who knows how these plastic cards will change American society. These cards have helped so much even if some people do not believe that. So, therefore these tiny plastic cards that can mean nothing to some people may mean a lot to others. Without them then the American society today would not be the same.